Now the markets will answer the question “What happens after the Olympics are over?” No one knows that answer yet but the games were indeed a spectacle. One item of context is appropriate. It is estimated that China spent $40 billion to prepare for these games. That’s a stunning number, especially in light of London’s reported $17.5 billion budget for the 2012 games. But my math says that China spent less than $31 for each of its 1.3 billion citizens. Remember: 1.3 billion times any number is a VERY BIG number.

USDA’ monthly Cattle On Feed report, released Friday, shows larger-than-expected July placements but and August 1 inventory that was quite close to analysts’ pre-report estimates. The key data from the report appear below. July placements were 2.4% higher than last year but substantially lower than the level expected by analysts. The July placements number is the second lowest since the series started in 1996; second only to last year’s July placements. July marketings were quite close to pre-report estimates. The average placement weight (refer to Figure 1) for July was 707 lbs., 9 higher than last month, only 0.6 higher than last year and 10 higher than the 5-year average. Our calculation of the number of cattle on feed for 90 and 120 days and more (Figuer 2) show that none of the categories are out of balance, suggesting that markets should be distributed quite normally over the next few months.

USDA’s monthly Cold Storage report, also released Friday, reports that total meat and poultry inventories on July 31 were 8.8% larger than last year and 0.5% larger than on June 30. This marks the fifth straight month of remarkably stable total meat and poultry stocks of about 2.3 billion pounds. The year/year increase was led by chicken (+12%) and turkey (+22%). Pork inventories were up 8% form last year but 4.8% lower than last month while beef inventories were 9.3% smaller than last year but 0.7% larger than on June 30.

The largest decline in chicken stocks was for breast meat and legs, indicating good domestic movement. Higher stocks of leg quarters and paws indicate some slowdown in export trade. Boneless beef inventories were 12% lower than last year but 2% higher than last month. Pork trimming stocks, on the other hand were 16% higher than last year but 18% lower than last month. The trimmings market has been on fire but much of that price strength has appeared in August — after the date of this inventory report.

Further Reading

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You can view the full report by clicking here.